Baltimore historic tax credits continue to show errors

Clipper Mill redevelopment, Woodberry

Baltimore Sun photo by Amy Davis

Another project by Struever Bros., Eccles & Rouse, Clipper Mill is a 17-acre development in Woodberry that gave new life to long-vacant factories. It is home to the Woodberry Kitchen restaurant, artists, craftsmen and residents who live in loft-style apartments, condominiums and town houses.

Another project by Struever Bros., Eccles & Rouse, Clipper Mill is a 17-acre development in Woodberry that gave new life to long-vacant factories. It is home to the Woodberry Kitchen restaurant, artists, craftsmen and residents who live in loft-style apartments, condominiums and town houses. (Baltimore Sun photo by Amy Davis)

If this sounds familiar, it should. On June 24 The Sun published the results of an investigation that found the city has failed to collect millions of dollars in potential revenue because of chronic errors and miscalculations in the historic credit program, which offers tax breaks for historic renovations.

With a new tax year starting July 1, we checked to see if the problems had been fixed on recently mailed bills. Earlier we’d examined the program’s 10 largest tax breaks and found that seven contained errors totaling around $2 million in uncollected city taxes over several years.

Owners of three of those properties no longer receive the break because the credit’s 10-year term has ended. But seven still do qualify for the discount — and we noticed mistakes on the bills for five.

The state agency that crunches numbers for the city says it independently discovered the errors during a regular internal check. “As time allows, we review the credits to make sure they are properly computed,” said Owen C. Charles, deputy director of the Department of Assessments and Taxation. He said the mistakes have been fixed or soon will be.

It’s unclear why city officials did not catch the mistakes before bills went out. Spokesmen for MayorStephanie Rawlings-Blake did not respond to questions that were sent to them and to Finance Director Harry Black and his deputy, Henry Raymond, who pledged to “consistently monitor" the historic credits.

Charles said one of the five mistakes happened because an assessment appeal wasn’t decided until June 19, after the state had forwarded information to the city. But a review of the other four shows they stemmed from misapplications of program rules, though Charles gave no specific explanation.

Here's one example: The building in Clipper Mill that houses Woodberry Kitchen should have a $127,000 tax break this year, but its bill shows a $63,000 discount. “We were aware of it as soon as we got the tax bill that something was off,” said property manager Ginny Spivey, adding that she notified the city.

In the other direction, the Abell apartments on downtown’s west side received an $80,000 break even though Charles says it should be $64,000 because projects costing more than $3.5 million get only a portion of the discount. The state made, and the city missed, the same error on that property going back to 2008.

“This is the first time I’m hearing of it,” said Steve Bloom, the local operating partner for PMC Property Group, which owns the Abell and several other apartment buildings in Baltimore.

In another case, the discount inexplicably vanished for a building on Fleet Street in Fells Point that should get the credit for several years to come.

In addition to fixing new mistakes, Charles said the state is in the process of checking for inaccurate credits from past years — and not just those identified by The Sun’s investigation. Any that are found will be recalculated, he said, resulting in revised tax bills. He said the timing for that review “will depend on what kind of time we have available over the next few months.”

Last week while reporting on the latest tax credit mess, we learned about an obscure 1999 Baltimore law that appeared to have potentially big consequences. It seemed to bar city homeowners from getting both a historic rehab tax credit and a homestead credit on the same house at the same time.

Five Baltimore homeowners have been getting erroneous historic rehab property tax credits for the past two years. Once the errors were discovered, the city was quick to demand that all five pay the money back — and within 30 days, thanks.